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Content Is King, But It Won’t Be For Long: Analyst

Content Is King, But It Won’t Be For Long: AnalystThis won’t go over well with the media moguls hobnobbing at the Allen & Co retreat in Sun Valley. But it’s the thesis behind the “neutral” rating that Barclays Capital’s Kannan Venkateshwar assigns to Big Media in his smart new 100-plus-page inaugural report on the industry. The major players – CBS, Discovery, Time Warner, Fox, Viacom, and Disney — make most of their profits from television. And although revenues in the field have grown over the last five years, “the source of this growth in most cases (with a few notable exceptions) has been through price inflation and an increase in the advertising inventory rather than a more sustainable growth in ratings,” he says. That spells trouble as Netflix, Amazon and others also produce content for the Web, and pay TV distributors including Comcast and DirecTV strike merger deals that make them stronger. They focus on shows and search engines — not networks and schedules. And as they forge stronger ties with subscribers, “traditional media companies get pushed further back into the value chain, further away from a direct relationship with the consumer.”
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Viacom Sued By Extra Injured On ‘World’s Worst Tenants’ Shoot

By | Tuesday June 24, 2014 @ 8:47pm PDT

Viacom Sued By Extra Injured On ‘World’s Worst Tenants’ ShootHere’s the latest legal action — at least the third in four months — involving the star of a reality show allegedly roughing up someone on the set. There was that slap fight on Lifetime’s Dance Moms, and the guy on Spike TV‘s Bar Rescue who went after a Vegas doctor. This time an extra on Spike’s World’s Worst Tenants is claiming assault and battery and negligence. Joshua Frager says he broke his collarbone after being shoved by series star Todd Howard, an ex-Marine who on the show is a “professional evictor, which is like a bouncer who stands guard at rental properties instead of nightclubs.” In his suit filed Tuesday in Los Angeles Superior Court (read it here), Frager names as defendants Viacom International, America’s Finest Television Corp, Zoo Production, Stevens and others (Spike is not among them). The plaintiff says that in January 2013, he was an extra in a Season 2 episode of Worst Tenants that was filming at Mount Waterman near Pasadena. Frager says he “was asked by Defendants through their agents/employees to fake a fall. Plaintiff is not a trained stunt person. During filming, the star of the show Howard forcefully pushed Plaintiff backwards to trigger the fall and as a result Plaintiff fell down the slope of the mountain on which the filming was taking place breaking his collar bone, injuring his arm and suffering other injuries to his person including soft-tissue injuries, bruising and lacerations.” Read More »

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Will A Federal Court Clear The Way For Unbundled Pay TV?

By | Monday June 23, 2014 @ 11:34am PDT

Will A Federal Court Clear The Way For Unbundled Pay TV?Investors and consumer groups will be watching for just such a possibility following U.S. District Court decision Friday to let Cablevision pursue an antitrust claim against Viacom. More than a year ago the cable company charged that it was improperly forced to carry 14 channels it didn’t want (including Palladia and Tr3s) in order to offer eight that it did. Viacom asked the court to dismiss the complaint, saying that Cablevision failed to make a prima facie case that its bundles violated antitrust law. But Judge Laura Swain said there were enough facts to “support plausibly an inference of anticompetitive effects.” Although far from a definitive ruling, the decision to let the case proceed “was not a given, so it was a victory for Cablevision,” Guggenheim Partners’ Paul Gallant says today.

Cablevision logoIf Cablevision prevails, the case could rock Big Media. Most of the top content companies’ business models depend on their ability to require pay TV distributors and their customers to pay for channels they don’t want. If the court says that’s illegal, then “that could feed into the nascent Telecom Act rewrite — or perhaps a narrower bill updating the 1992 Cable Act —  in an unwelcome way for content companies,” Gallant says.

But the case could take more than a year to approach a verdict. Viacom appears ready to fight: Cablevision wants to “renege on a long-term business agreement, using arguments directly contrary to positions it has taken in other cases and to its own business practices,” the … Read More »

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Viacom Picks Up Stake In Defy Media

By | Monday June 9, 2014 @ 10:47am PDT

Defy MediaAdd Viacom to the companies cozying up to online video networks. The entertainment company swapped its gaming focused digital properties — casual game developers Addicting Games and Shockwave, and video unit GameTrailers  – for an unspecified minority stake in Defy Media. It picks up a seat on Defy’s 10-member board which is chaired by former Nickelodeon and Oxygen Media chief Gerry Laybourne and includes reps from Lionsgate, ZelnickMedia and ABS Capital.  (The network company, popular on YouTube, was formed last year when Alloy Digital and Break Media merged.) In addition to the transaction, Viacom and Defy have agreed to syndicate content and develop and distribute entertainment, although they don’t provide details. Viacom picked up Addicting Games and Shockwave in 2006 as part of its $200M acquisition of Atom Films, and bought GameTrailers in 2005.

But Viacom “was not investing materially in them,” Defy President Keith Richman tells me. That should change with the new ownership. Gaming “is core to our business,” he says. CEO Matthew Diamond adds in a statement that the properties Viacom is contributing “represent meaningful and diverse revenue opportunities we aim to expand across our existing brand portfolio.”

This is the latest instance of a traditional entertainment company strengthening bonds with an online video company. Lionsgate recently forged an alliance with RocketJump Studios. Disney committed about $1B to pick up Maker Studios. Time Warner led a fundraising round at Machinima. And last year DreamWorks Animation … Read More »

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Big Media Moguls With Out-Of-Whack Compensation: Exclusive Deadline List

Highest Paid Media ExecutivesHere’s a question to ask yourself if you aren’t sure whether media mogul pay reflects merit or cronyism: Did Viacom and CBS executive chairman Sumner Redstone deserve $93M, an 80% year-over-year increase, in the combined compensation he received from the companies in 2013? The answer to this query, and others like it, seems especially relevant here in Deadline’s fourth annual effort to try to make sense of the outsized sums media companies pay their leaders. They’re among the most lavishly compensated in corporate America where CEOs made 206 times what the average worker did in 2011, up from 26.5 times in 1978, economist Thomas Piketty notes in his surprise bestselling new book about growing wealth disparities. Compensation 1That strikes many as fundamentally unfair: The California legislature is weighing a bill that would raise tax rates for companies that give their CEOs more than 100 times the average pay for their workers.

Here’s our contribution to the discussion: a tally of the highest-paid executives in media, with metrics and analysis to help you decide what they’re worth. The chart on the right (click to enlarge) shows media execs whose compensation exceeded $10M in 2013 according to company proxies. Below you’ll find our in-depth look at the top 11 earners on the list. Why 11? That enables us to add Rupert Murdoch, who shouldn’t be left out of any discussion of media wealth and power. Those in this Group of 11 collectively made $448.6M in 2013, +15.6% vs 2012, with their median pay  +8.3% to $32.5M.

Related:
Out Of Whack – 2012
Out Of Whack — 2011
Out Of Whack — 2010

One of the things you’ll see is how much Redstone contributes to the high level of executive pay in media. He and other leaders at corporations he controls occupy four of the 11 spots on our list. That has a ripple effect: All companies represented here (with a caveat, discussed below, for News Corp) include Viacom and CBS in the list of peers against which they benchmark pay for their own execs. And Redstone isn’t all that unusual. You frequently see high pay at enterprises, like many in media, run by families that own little equity but control decision-making by virtue of their supervoting shares.

Boards usually justify their high outlays by pointing to metrics of company success, which they credit to the CEOs. But while those on this list are smart and shrewd, it’s worth asking how much of their good fortune — including their rising stock prices — also represents good luck. Keep in mind that all of the media powers represented by this year’s top 11 own broadcast and/or pay TV channels. Cable and satellite companies complain that these programmers have oligopoly power to raise prices on distributors. Many are aggressively doing so, which distributors say pressures them to raise your rates. Programmers also benefit from a new source of cash: license fees from digital services including Netflix and Amazon Prime.

Executive compensation payOur list and the charts that follow include Deadline’s annual Out-of-Whack analysis. It illustrates not only that CEOs make vastly more than the public. Some boards are far more generous to the top dog than they are to others in the C-suite. That could be a sign that directors are in the CEO’s pocket, or lack confidence in their executive bench, many corporate governance experts say. In any case, research shows that lopsided outlays promote groupthink, damage morale, and often depress a company’s stock price. It’s a judgement call as to how much of a disparity is too much. Yet those who track the phenomenon typically become alarmed when a CEO makes more than three times the median for the four other top execs whose income must be disclosed to shareholders per SEC rules. Eighteen of the 30 companies we monitor and that have filed information for 2013 failed the test, often miserably, up from 14 out of 31 last year. Read More »

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Deadline Big Media 83 – The Really Big Cable TV Show

By and | Saturday May 3, 2014 @ 12:47pm PDT

Deadline Big Media ep 83In this week’s podcast, Deadline’s executive editor David Lieberman and host David Bloom recap one heck of a week in the business of providing services that looks more or less like television across all kinds of delivery platforms. The NCTA cable-TV conference opened in Los Angeles, attracting numerous big-name speakers such as the FCC chairman, but big deals also seemed to be breaking out everywhere. There was talk of a massive deal between AT&T and DirecTV Networks; a $20-billion swap of subscribers between Charter and Comcast, and Viacom’s $757 million acquisition of the UK’s Channel 5. Along the way, DreamWorks Animation’s Jeffrey Katzenberg seemed to write off his core business, and got roundly whacked by another media mogul, Jeff Bewkes of Time Warner. In a word, “ouch.”

Listen to the podcast in your choice of audio formats here:
Deadline Big Media podcast 83 (.MP3 version)
Deadline Big Media podcast 83 (.M4A version) Read More »

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Viacom Execs Assure Investors That Purchase Of Channel 5 Won’t Hurt Cash Returns

By | Thursday May 1, 2014 @ 7:01am PDT

viacom daumanviacom daumanPhilippe DaumanShareholders are accustomed to raking in cash from Viacom’s prodigious stock repurchases and dividends. So this morning’s news that it will spend £450M ($757M) to buy the UK broadcaster has many wondering whether the party’s over. But execs told analysts in a conference call not to worry: “It will not impact the buy back program at all,” COO Tom Dooley says. The funds to buy Channel 5 were already parked overseas (that means no U.S. taxes) so “it’s not cash that would have been available for the stock buyback program” in the U.S. What’s more, the investment “will yield a very high return” — he says low to mid teen percentages, comparable to other company operations — and includes £125M of net losses that can be used to lower Viacom’s taxes. CEO Philippe Dauman added that the deal will boost operating income in the first year after it closes and will enable Viacom to increase spending for programming that can be used on “existing and future networks around the world.”

We’ll see whether investors are persuaded. Viacom shares are down slightly in early trading, despite this AM’s disclosure of stronger than expected earnings for the first three months of this year.  Bernstein Research’s Todd Juenger, a frequent Viacom critic, says that Read More »

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Viacom To Pay £450M For UK Broadcaster Channel 5

Viacom channelsThe auction of Britain’s Channel 5 has come to an end. Viacom and Northern & Shell Media Group have agreed to a deal that will see Viacom International Media Networks pay £450M ($757M) for the broadcaster. Northern & Shell boss Richard Desmond acquired the free-to-air network in 2010 for £103.5M and was believed to be seeking a buyer willing to pay about £700M. As late as last month, Discovery and BSkyB were said to be teaming up to jointly bid about £350M for Channel 5, but the parties ultimately decided ch 5not to go forward. Viacom’s acquisition of Channel 5, which averages about a 4% share, will make it the first U.S. group to own a British public service broadcaster. The network is home to Big Brother and airs such U.S. dramas as Under The Dome, CSI and Person Of Interest. Channel 5 does not have much in-house product, but Viacom today said the deal would “dramatically increase” its investment in UK-produced content, which is good news for producers in the increasingly hot UK TV sector. Viacom’s international reach through its pay-TV businesses will also be seen as a lucrative window for UK producers. “We look forward to partnering with local producers to introduce more UK-created content to global audiences, and will continue to explore opportunities in the UK, both in the free-to-air … Read More »

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Viacom Beats Fiscal Q2 Earnings Estimates Despite Slide At Paramount

VIACOM LOGOIt’s usually a tipoff that something’s wrong when an earnings release talks about how much cash a company gave back to shareholders in a quarter, and then focuses on future endeavors. But in Viacom‘s case, on first glance, the fiscal Q2 results out this morning look merely blah, not bad. Net income at $502M was +5% vs the first three months of 2013, on revenues of $3.17B, +1.2%. The top line was a hair shy of the $3.2B that analysts expected. noahmovieEarnings at $1.13 a share beat forecasts for $1.05.  The main Media Networks business saw operating income rise 9% to $949M on revenues of $2.38B, +6%. Rate hikes to pay TV distributors resulted in an 11% pop in affiliate revenues. Domestic ad sales increased 2% while worldwide was up 3%. The Paramount-led Filmed Entertainment unit told a different story with operating income down 83%, to $11M, on revenues of $831M, down 12%. Viacom attributes the drop to “lower carryover revenue from prior period releases.” The Wolf Of Wall Street didn’t howl enough to prevent a 17% drop in theatrical revenues. Home entertainment fell 30% as the studio offered fewer releases. CEO Philippe Dauman reminded shareholders that the company “returned another $2B to investors through our share buyback and dividends” and noted that Paramount “kicked off its highly-anticipated summer slate with the successful release of Noah at … Read More »

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Deadline Big Media 77 – CinemaCon Preview Podcast

By and | Thursday March 20, 2014 @ 12:21pm PDT

Deadline Big Media ep 77In this week’s podcast, Deadline Executive Editor David Lieberman and host David Bloom preview CinemaCon, the big annual gathering of theater operators in Las Vegas that puts the popcorn in popcorn movies. They also examine the NAB’s claims to the FCC of a faltering local TV business; update the Comcast-Time Warner Cable merger with news from the states; whistle through the highlights of the relatively quiescent Disney annual meeting; examine the implications of the recent settlement of the long-running Viacom-YouTube copyright lawsuit; and ponder what’s next for Yahoo, given the imminent stock IPO by Alibaba, which it partly owns.

Deadline Big Media podcast 77 (.MP3 version)
Deadline Big Media podcast 77 (.M4A version)

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Viacom And YouTube Settle Copyright Dispute

By | Tuesday March 18, 2014 @ 5:39am PDT

viacom-youtube-logos-300x283__130418214142-275x259No details yet on the terms of the agreement ending the $1B action that Viacom launched in 2007. The entertainment giant and Google’s YouTube say the resolution is a sign of the “growing collaborative dialogue between our two companies on important opportunities, and we look forward to working more closely together.” Viacom had alleged that YouTube profited by turning a blind eye toward instances where users improperly posted its content, including clips from Comedy Central’s The Daily Show. But Google said that the Digital Millennium Copyright Act’s “safe harbor” provisions absolved it of responsibility for infringements by its users. Google largely prevailed in decisions at the U.S. District Court in New York, and in appeals. But Viacom continued its appeal, charging that YouTube induced users to post copyright infringing content.

Here’s today’s release: Read More »

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Viacom Plans International Rollout For Spike Channel

By | Monday March 10, 2014 @ 10:25am PDT

Sumner Redstone Honored With Star On The Hollywood Walk Of FameCEO Philippe Dauman just disclosed his plan to add Spike to Viacom‘s overseas pay TV offerings, joining a portfolio that includes MTV, Nickelodeon, Comedy Central, and the Paramount Channel. “We’re doing a little bit of proof of concept,” he said today at the Deutsche Bank Annual Media, Internet & Telecom Conference. Spike TV logoHe’s optimistic because “we have been creating a lot of original programming on Spike itself,” and much of it — especially scripted shows — is “able to travel.” Overseas expansion is “a big, big opportunity” for Viacom and he sees distribution deals in countries including Brazil, Italy, and Russia helping to “fuel long-term growth” for the cable operation. In addition, “we look at India and think of our company a quarter century ago. It’s a great value creation opportunity.” Dauman also is taking a global view for Paramount. Read More »

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FCC Fines Viacom, ESPN, And NBCU $1.9M For Misuse Of Emergency Alert Sounds: Video

By | Monday March 3, 2014 @ 10:14am PST

Olympus Has FallenThe companies got into trouble after they ran ads for FilmDistrict‘s 2013 thriller Olympus Has Fallen that include the distinctive Emergency Alert System warning sounds, the FCC says today as it proposed what it calls the largest ever penalties for its misuse (watch the ad below). Viacom will be hit hardest with a $1.12M fine for airing the ad 108 times over five days on Spike, VH1, MTV, Comedy Central, MTV2, Centric, and BET. NBCUniversal will have to cough up $530,000 for running the ad 38 times over six days on Syfy, USA, and five regional sports networks. And ESPN follows with $280,000 for running the ad 13 times over four days on ESPN, ESPN2, and ESPNEWS. “The FCC has long prohibited the transmission of actual or simulated EAS Attention Signals or tones in circumstances other than a real alert or an authorized test of the EAS system,” the FCC says. The cable companies said that the rules don’t apply to them because they don’t participate in the EAS program, the FCC notice notes. Read More »

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Deadline Big Media 70: The Shorter Trailers Podcast

By and | Friday January 31, 2014 @ 6:03pm PST

Deadline BIG MEDIA podcast 70In this week’s podcast, Deadline’s executive editor David Lieberman and host David Bloom catch up on the many highlights from earnings season announcements, beginning with those by possible dance partners Comcast and Time Warner Cable and what their news might mean for Comcast’s takeover bid. They also take the market temperature on Viacom and tech giants led by Google — which sold off its Motorola Mobility unit after owning it just two years — and Facebook, Apple, Yahoo and Amazon. They also look at exhibitors’ demands for shorter movie trailers and whether studios will play along.

Listen to the podcast in your choice of audio formats here:
Deadline Big Media podcast 70 (.MP3 version)
Deadline Big Media podcast 70 (.M4A version)
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Viacom CEO Touts EPIX Along With International And Digital Opportunities

By | Thursday January 30, 2014 @ 6:43am PST

Philippe Dauman always seems to see Viacom through rose colored glasses when he talks with analysts, and continued to do so in his presentation this morning to discuss the company’s latest earnings report. viacom daumanPhilippe Daumanviacom daumanviacom daumanHe’s excited about EPIX following Time Warner Cable’s recent agreement to offer the premium movie service beginning in May. That shouldn’t be affected if Charter Communications succeeds in its effort to buy the No. 2 cable company. “We look forward to seeing what happens,” Dauman says. Viacom and its partners, Lionsgate and MGM, plan to increase original programming including scripted series for the channel, which Dauman says has “the best line up [of movies] of any pay service in the marketplace.” He hinted that backers will step up promotion for the channel, saying that they will “make that work for TWC” as execs hope to also land distribution deals with Comcast and DirecTV. Meanwhile the CEO talked up overseas opportunities as Viacom prepares to launch Paramount Channels in Russia and Hungary in the current quarter. “We’re going to be opportunistic about expanding our footprint…We will take every opportunity we see to launch a new network.” Dauman’s encouraged by the ad market overall. “We’re seeing solid strength in the Read More »

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Viacom Creates A Unit To Coordinate Program Acquisitions

By | Thursday January 23, 2014 @ 6:49am PST

VIACOM LOGONEW YORK, Jan. 23, 2014 — Viacom Inc. (NASDAQ: VIAB, VIA) today announced the formation of a Program Acquisitions Group to coordinate the company’s domestic program acquisition activity across its portfolio of domestic media networks, including BET, Centric, MTV, VH1, CMT, Comedy Central, Spike TV, TV Land, Nickelodeon and Nick at Nite.

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Viacom To Launch Customized Kids’ TV Channel: WSJ

By | Wednesday January 22, 2014 @ 1:38pm PST

viacom-logo-5__121023210511__130718211402-200x97This sounds like it could be a parents’ dream-come-true. Viacom is planning to launch a new TV channel for kids that can be customized according to parents’ tastes and combines both scheduled programming and on-demand options, such as Netflix, the Wall Street Journal reports. My Nickelodeon Jr will be available first on Verizon’s FIOS service, but Viacom plans to bring it to other pay-TV cable operators in the near nick-jr-logofuture, according to the Journal. Parents will be able to personalize the content by choosing their preference for seven themes such as “word play,” “super-sonic science,” and “get creative.” Based on those preferences, My Nick Jr. will choose content to air from hundreds of episodes in the Nick Jr. library. Children can weigh in by clicking on smile or frown icons, and the service will tweak the programming lineup accordingly. It’s similar to the thumbs-up and thumbs-down rating system used by Pandora and other music services to personalize streaming stations. Parents also can get reports on what their children watch and can program the channel to shut off after a set period. The premium channel will have no ads, according to the Journal.

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Viacom Introduces Unit To Help Advertisers Blend Pitches With Programming

By | Wednesday January 22, 2014 @ 6:38am PST

VIACOM INC. VELOCITY LOGONEW YORK, Jan. 22, 2014  – Viacom Inc. (NASDAQ: VIAB, VIA) today launched Viacom Velocity, a new full-service group offering insights-driven integrated marketing and creative content solutions from Viacom Media Networks Music and Entertainment.  Viacom Velocity merges the company’s existing Music and Entertainment Integrated Marketing teams, under Dario Spina, with a new creative team headed by Niels Schuurmans, former Executive Vice President, Consumer Marketing and Executive Creative Director at Spike TV, who joins as Executive Vice President, Viacom Velocity Creative Content Solutions.  Both Spina and Schuurmans report to Jeff Lucas, Head of Sales for Music and Entertainment.

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Viacom & Time Warner Cable Reach New Carriage Deal; Adds EPIX To Lineup

By | Tuesday December 24, 2013 @ 7:21am PST

viacom-logo-5__121023210511__130718211402-200x97With mere days to go before their latest deal expired, Time Warner Cable and Viacom announced a new carriage agreement today. Among keeping the Viacom channels on for New Year’s, the near last minute multi-year deal adds premiere cabler EPIX to the TWC lineup for the first time. “Our new agreement offers consumers a comprehensive collection of innovations across platforms, including the availability of EPIX and access to Viacom’s vast array of popular content within the Television Everywhere environment both in and out of their homes,”said Viacom President and CEO Philippe Dauman in a statement Tuesday. Specifics of the new agreement were not disclosed, but you can read the release here:

Related: Were Consumers The Biggest Losers In The CBS-TWC Dispute? Read More »

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